Cemex ‘encouraged’ by results
By Thomas Allen27 July 2018
Mexico-based materials company Cemex recorded a year-on-year growth in net income of 32% in the second quarter of 2018, reaching US$382 million.
Fernando Gonzalez, the firm’s CEO, said, “We are encouraged by the very favourable volume dynamics we saw in most of our portfolio during the quarter, with improvements in pricing which should translate into higher profitability during the second half of the year.”
On a like-for-like basis and adjusting for currency fluctuations, consolidated net sales were up 7%, compared to the same period in 2017, to US$3.8 billion. This was attributed to higher product prices in all regions, along with higher volumes sold in Mexico, the US, Europe, and the Asia, Middle East & Africa region.
Gonzalez said, “In Mexico, we are pleased with the year-over-year, double-digit growth in ready-mix and aggregates volumes and high-single-digit increase in prices.”
Net sales in Cemex’s Mexican operations increase by 13% on a like-for-like basis in the second quarter of 2018.
“In addition, in our Asia, Middle East & Africa region, we saw a high-single-digit growth in cement volumes in the Philippines and Egypt with favourable sequential pricing dynamics,” Gonzalez added. Operations in the region reported a 10% increase in net sales to US$353, compared to the same quarter in the previous year.
In Europe, net sales for the quarter grew by 6% on a like-for-like basis to US£1.04 billion.
Cemex’s overall operating EBITDA (earnings before interest, taxes, depreciation and amortization) increased by 4% compared to the equivalent period in 2017, reaching US$714 million, while the operating EBITDA margin was down from 19.5% in the second quarter of 2017 to 18.8% in the second quarter of this year.
A Stronger Cemex
The company has also announced a plan, A Stronger Cemex, to enhance total shareholder return.
Gonzalez said, “During the next 2.5 years, we will work to optimise our portfolio by focusing on markets with the greatest long-term growth potential and selling between US$1.5 and 2 billion of assets.
“We will also implement actions to achieve US$150 million in cost savings as an opportunity to continue improving our profitability.”
As part of the new plan, the company also intends to reduce total debt by US$3.5 billion by the end of 2020. During the second quarter of 2018, total debt plus perpetual notes were said to have declined by US$462 million, giving a cumulative reduction of US$6.6 billion since the end of 2013.